373

FINAL ACCOUNTS

Balance Sheet of Mr. Sudhir as on 31st March 1994

Libilities Amount Rs. Assets Amount Rs.

S.Credltors 30,000 Cash In hand 2,000
Sudhir's loan 10,000 Cash at Bank 5,000
Creditors for machinery 10,000 Less: Cheque
Outstanding expenses: dishonoured _500 4,500
Interest on loan 500 2,500 S.Debtors 50,000
Other expenses 2,000 3,000 Add: Dishonoured Cheque
Bills payable. . 2,72,202 500
Capital: Balance as Dishonoured bill _ _300
per T/B 1,50,000 50,800
Add: Net profit 1,08, 852 less: Provision for
2,58,852 doubtful debts 2,540 48,260
Less: Bills Receivable 10,000
Drawings In cash 2,000 Less: Dishonoured _ 300 9,700
in goods 900 2,900 Machinery 80,000
2,55,952 Add: Newly
Add: Adjustment for opening purchased 10,000
stock, 16,250 Installation
charges 300 10,300
90,300
Less: Depcn. 8,258 82,042

Furniture
18,000 6,200
Less: Depreciation 1,800

Building 1,00,000 90,000

Less: Depcn. 10,000

Closing stock
Balance as per T/B 60,000 75,000
Add: Appreciation 15,000

3,27,702 3,27,702

Manufacturing Account
Some films like to first ascertain the cost of goods manufactured by them during the year distinctly before
they prepare the trading sccount and establish the gross profit. This account is called the Manufacturing Account and
is prepared in addition to be Trading Account. It has the undermentioned characteristics:
1. Since the purpose of preparation of this account' is to ascertain the cost of goods produced during the year,
the
448

Consignment to Kanpur Account

Date Particulars Amount Date Particulars Amount Rs.
Rs.

1934 To Goods sent on 40,000 1994 Dec. 31 By Kanpur Agent 31,000

July1 consignment A/c Sale proceeds 10,375
Dec 31 To Bank A/c By Stock on 10,000
expenses 1,500 consignment A/c
To Kanpur Agent Exp. 2,500 By Goods sent
To Kanpur Agent Commn. 1,860 on consignment
To Consignment stock A/c Loading
reserve A/c loading 2,500
To Profit & loss A/c. 3,015
transfer

51,375 51,375

Goods Sent on Consignment Account

Date Particulars Amount Rs. Date Particulars Amount Rs.
1994 To 1994 By Consignment
Dec. 31 Consignment July 1 A/c 40,000
to Kanpur A/c 10,000
adjustment Trading a/c
transfer 30,000
40,000 40,000

Kanpur Agent Account

Date Particulars Amount Date Particulars Amount
Rs.
1994 1994
Dec. 31 To Consignment to July 1 By Bills Receivable
Kanpur A/c. 31,000 Account 15,000
Dec. By Consignment to
31
Kanpur A/c
expenses 2,500
By Commission 1,860
By Bank A/c 11,640

31,000 31,000
449
Bills Receivable Account
Date Particulars Amount Date Particulars Amount
Rs. Rs.
1994 To Kanpur Agent: 15,000 1994 By Bank Account By
July 1 July 1 Discount A/c
15,000

Bank Account (Inclusive)

Date Particulars Amount Date Particulars Amount
Rs. Rs.
1994 To Bill Receivable 14,700 1994 By Consignment Kanpur 1,500
July 1 Account To Kanpur 11,640 July 1 Account
Dec. 31 Agent

Discount Account
Date Particulars Amount Date Particulars Amount
Rs. Rs.
1994 To Bills Receivable 300 1994 By Profit & Loss Account 300
July 1 Account Dec. 31
300 300

Profit & Loss Account

Date Particulars Amount Date Particulars Amount
Rs. Rs.
1994 To Discount A/c 1994 By Consignment to Kanpur 3,015
Dec. 300 Dec 31 A/c
31

Stock on Consignment Account

Date Particulars Amount Date Particulars Amount
Rs. Rs.
1994 To Consignment to 10,375 1994 By Balance c/d 10,375
Dec 31 Kanpur A/c Dec. 31
1978 To Balance b/d 10,375
Jan.1

450
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451
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452
A TEXTBOOK OF ACCOUNTANCY

Working Notes:
Commission has been calculated as follows:
3\4 th of invoice of goods sent (Invoice value) 10%
Commission on this figure Excess value realized:
Rs.19,500 Rs.15,000 = 4,500 20%
20% of excess value realized

15,000
1,500
900
2,400

Stock has been valued as: 1\4 th of goods left unsold 1\4th of Expenses
Seema is not a del credere agent, hence the bad debt of Rs. 400 has to be borve by Arun.

Illustration No. 12
Ram & Co. of Delhi sent on consignment to their agent in Calcutta goods invoiced at Rs. 45,000, this being selling
price of the consignment obtained by adding 30% to the cost price to cover expenses, profit and selling commission.
At the end of six months the agent remitted the sum of Rs. 12,000 made as under:

Proceeds of goods sold

Less: 5% commission 650
Expenses 350
Net proceeds

13,000
1,000 12,000

The agent reported the goods of the invoice value of Rs, 600 have been totally damaged in transit, and he
sent a list of stock still held amounting TO Rs. 31.400.
Give the journal eateries necessary t record these details in the books of consignor, and also the ledger
accounts.

453

Solution
IN THE BOOKS OF RAM & CO Consignor CONSIGNMENT ACCOUNT

Date Particulars L. Debit Credit

F.
Rs. P. Amount Rs. P.

Consignment to Calcutta A/c. Dr. 45,000 00

To Goods sent on 45,000 00
Consignment A/c.
(Being goods sent on consignment
to Calcutta)
Profit & Loss A/c Dr. 464 54
To Consignment to Calcutta A/c 161 54
(Being the amount of Ioss-in-
transit at invoice price at Rs.600)
Consignee's personal A/c Dr. 13,000 00
To Consignment to Calcutta A/c 13,000 00
Being the amount of sales
proceeds)
Consignment to Calcutta A/c Dr. 1,000 00
To Consignee's Personal A/c. 1,000 00
(Being the amount of consignee
expenses & commission)
Consignment stock account A/c 31,400 00
To Consignment to Calcutta A/c. 31,400 00
(Being the invoice value of closing
stock)
Consignment to Calcutta A/c Dr. 7 ,246 15
To Consignment stock 7,246 15
reserve A/c. (Being the difference
between

invoice price and actual price)

Goods sent on consignment A/c
To Consignment to Calcutta 10,384 61
(Being the difference in the value
of goods sent on consignment
between invoice price and actual
price)
Consignment to Calcutta A/c. 2,000 00
. To Profit & Loss A/c. 2,000
(Being the amount of profit transferred
to Profit & Loss
Account)